Friday, February 26, 2016

The Most Commonly Leased Car Brands in America (and the Most Commonly Purchased)

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From the March 2016 issue

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What do drivers of Smart Fortwos and Maseratis have in common? It’s not their propensity to park illegally, but a shared distaste for car ownership. Three-quarters of them lease, the easiest way to slide into any new car with the least commitment and typically less upfront cash. With help from analytics firm IHS Automotive, we gathered lease rates for 41 brands to see whose customers actually buy and whose merely lease. While only one-quarter of all new retail transactions are leases, luxury brands make the bulk of their profits from them. Turn in the old car, throw down a few grand, and poof!—there’s a new Mercedes E350 wearing your old license plate.

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Since the 2008 recession, automaker-owned banks have freed up more credit, which only makes leasing more attractive. The main growth areas? Leases of non-luxury compacts and crossovers, plus full-size pickups, are proof that leasing is “expanding out of the traditional segments,” says IHS analyst Tom Libby. And many off-lease cars are remarketed as certified pre-owned; leasing one perpetuates a cycle that keeps profits humming and monthly checks outflowing. Here, we chart the percentage of each brand’s new-car customers who lease:

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The most commonly leased cars are small luxury sedans. Leases soaked up 60 percent of these models. More than half of all luxury sedans of any size are leased.

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STATE OF AFFAIRS

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New Englanders love their leases, as five of the chowder-chugging states rank in the top 10. Texans don’t trust them so much. Despite being the No. 2 retail auto market (behind California), Texans lease just 11 percent of their new cars. Arkansas comes in last with just 2 percent.